Jute master's crunch-busting new business is in the bag

Published on Tuesday 7 April 2009 21:35

JUTE is part of Simon Pritchard's very fibre. As the fourth generation of a Dundee jute dynasty, Pritch-ard is at the heart of a renaissance for the material, as shoppers turn away from plastic bags and opt instead for more durable wares.

The Natural Bag Company – the business that Pritchard set up to sell his wares – already counts Diageo, Proctor & Gamble and Robert Wiseman Dairies among is growing list of more than 800 customers.

As well as shops and businesses, local authorities, schools and tourists attractions are snapping up the bags. Turnover rose five-fold last year to 250,000, with businesses as far afield as Cornwall using Pritchard's services.

While he admits to scaling back his expansion plans during the recession, Pritchard is already seeing reasons for optimism: he reported a noticeable downturn in business during the winter but activity picked up in March, with sales ahead of the same month last year.

"I think at the end of last year, when there was all the bad news about the banks, people put their buying on hold for a while to wait and see what happened," Pritchard says. "Having spoken to people in lots of different industries, I think that was true for a lot of businesses. January seemed to be a quiet month for everybody. But we've seen things pick up very quickly.

"We're focusing on our core business and have put expansion plans on hold for just now. But if things carry on the way they have been for the past six weeks or so then we'll definitely be thinking again of expanding by the end of the year."

One of the other challenges faced by Pritchard has been the weak pound.

"It's made it more difficult for us," he admits. "Bag prices have gone up by about 10 per cent in the past few months due to the exchange rates, which has definitely had an effect."

While costs may be going up, Pritchard is still confident in his supply of bags. He says: "The suppliers we deal with are among the most reputable – smaller suppliers come and go but having good quality suppliers has always been important to us."

When J Mackenzie Stewart, Pritchard's great-grandfather, set up his eponymous Jute company in 1911, he was importing the raw material from India to feed the relentless appetite of Dundee's jute mills.

His sons took over the business in the 1930s and began importing the finished jute clothes and yarns instead.

"A lot of the yarns were going to the carpet manufacturers," explains Pritchard. "Latterly the market for all these products has declined so I decided it was time to change tack. It's nice to know that the tradition can be kept going."

The change of direction seems to be paying dividends for Pritchard, who also lists Scone Palace, Sandringham Estate and Shakespeare's Globe Theatre among his clients.

Pritchard thinks one of the secrets to his success is that he can handle smaller orders.

"We bring in a lot of plain bags and then have them printed here in Scotland and so can turn round orders much faster than other people and also take smaller orders," he explains.

"Most factories in India will only handle large orders and so wouldn't be interested in just doing 100 bags, whereas we will do small batches, which is good for small shops or schools."

But with recession gripping the economy, what is the outlook for Pritchard's jute bags?

"Plastic bags are going to continue to decline," Pritchard says. "Most people seem to be taking bags with them to the shops and jute bags are now probably the most common reusable bag . If people are being charged 5p a time for plastic bags in the supermarket then that's 5p they don't need to spend if money's tight."

TOP TIPS

Focus on what you do best

Don't try to spread yourself too thin to pick up pieces of business here and there. If you've got limited resources, like many small companies do, concentrate on what you do best.

Look after the money

Keep costs and cash flow under control. It is increasingly difficult because debtors are trying to hold on to their money for as long as possible.

Mind the quality

Don't try to save money by cutting quality. It's an easy thing to do but when the recession's over customers will remember if you've been cutting the quality.